Month: July 2017
Threatened by AI and Block Chain, should the freight forwarder feel threatened or embrace the digitization?
Get shipping quotes in a matter of minutes. Book your FCL or LCL online with a click of a button. Ur a digital hero and want to do it yourself, what can go wrong right? Good luck to you.
As a freight forwarder I have noticed a few new disruptor companies entering the marketplace this year only. We’re talking about new companies that like to eliminate the freight forwarder and want customers to book their container direct from whoever, think Uber among ocean shipping or perhaps Airbnb among container transport. Not sure what they think or have been smoking.
Customers skipping the freight forwarders by booking their own cargo for transit is just one aspect that the freight forwarder manages for you. While digitization can make for a smoother and more efficient information transmitting process, the industry still faces many challenges in trying to automate the complete freight forwarder tasks and obligations.
Why I think digitization is harder with freight forwarding.
The freight forwarding industry is a more complex industry than for example travel agencies, a commonly cited example of a field that successfully transitioned to digitization.
A consumer can book a flight from one city to another, but the only “party” involved is the airline and the government of that country you would like to enter. With freight forwarding, everyone can book a shipment from one port to another port, but there are many more parties involved, like a truck collecting empty container from the port need access to the highly secured container yard, picking up the goods, tariff filing agency, customs declarations or duties through export customs broker, import customs broker and delivery to the final destination and returning that empty container to the yard. “The whole process can be extremely complicated,” with multiple vendors makes is almost impossible to automate the process in one software solution, plus each country has its own rule and regulation.
No way that new tech companies would easily cover all of global shipping while some carrier employees have no clue what they are doing. Virgin Shipping recently tried obtaining standardized quotes from a few of the major online platforms and was surprised by its outcome. (One example includes a 109-year delivery time, thanks to a technical glitch). And one was aimed only at smaller companies, standard services and sizes, nowhere near suitable to disrupt the FF agent.
Yet the freight forwarding role doesn’t go away just by clicking on a “book it” button. You still have to do the work behind the scenes, arranging the ocean freight, trucking and customs clearance. The online software companies are merely the front end, the customer-facing software to make the process easier, but who do you think processes your documents based on the online form you filled? Or who will ask you for clarification if key info is missing? And everything in shipping is key info believe me. Correct, your freight forwarder is still in the background and you are paying for it.
The challenge: eliminating the freight forwarder and linking truck broker, governments and carriers to the shipper
Shipping is, let’s face it, complex. A shipper using an online booking system to book a container, in this digital age, makes sense, if only their needs were simple, and they know precisely what they want and they’re familiar with the routing and they skip the countries that have maritime regulations in place.
Routes like Guam to Durban, for example, have so many players on the route that it’s impossible to get a solid bid as it requires transshipment and therefore multiple different carriers and multiple quotes. If only the needs are simple and it’s just a port-to-port service without trucking, tariff filing and customs issues or strange duty requests, then this is a time when you might go with an online system with a freight forwarder behind it who has a limited number of activities but get to charge you regardless.
When a shipper is new to the market or has complex shipping needs, online platforms aren’t able to handle the many variables. Shipping terms include various “what ifs” based on customs exam costs, or trade offs in shipping to a cheaper port, bunker and demurrage. Having an agent to deal with different time zones and reducing potential costs adds value, this service actually cost time, money and hassle. lots of hassle.
With the current tools used for shipping it is only possible with total buy in from all players and government to digitize the freight forwarding process and eliminate this beautiful profession. Another method would be to disrupt the classic modes of cargo tools such as container, yard, truck, and ship and make them autonomous and the commodity readable and traceable only then is when there will be no need for a freight forwarder.
THREE RULES FOR SHIPPING
Are you that lucky individual that has the task to arrange for shipping? Here is what you need to know.
Rule number 3
Domestic transports can be tough enough, but when you have to consider shipping for international trade, you may start to get worried about who are the players involved and what is/are their added value.
Knowing all players isrelated to your shipping T/C and if you are using brokers somewhere along the chain of shipping.
Therefore, know all parties involved and with knowing I mean have their contact details and time zones at hand as you will need it, regularly.
Rule number 2
Confirming it and then arranging it and eventually collecting it does not happen overnight, I know this and if you did not find out the hard way you knew and now know this also. Nevertheless, it surprises me how often our dear friends think we can still make the vessel that will depart in three days. Ain’t going to happen and don’t pressure your players as you will need them again.
Time is key, prepare ahead, confirm ahead and instruct your players ahead and remember, your customer is also a player that need preparation.
Rule number 1
This is the dough between rule number 2 and rule number 3, without this your players will not perform, at some point. One starts with a Quote based on the T/C, makes a total sum of charges and costs to be received by the players, informs the client 1 total sum with a validation date and description of shipment linked to these costs. Any changes along the chain of operation will affect the total sum and that bill will be send to your mailbox (assuming you are paperless).
Charges, look ahead and prepare your costs as precise as possible, not knowing is no excuse as it is your job to know. Increased costs while the quoted service did not change is not cool and it is probably the last time you shipped for that customer.
Conclusion
Although knowing what is in the box is important (see our overweight article), don’t forget what happens and need to happen around the box. Remember these three rules and be friendly to your players and you will be fine. Else, rule number 1 will be activated.
If you feel you are being neglected in one of these three rules allow us to show you the strength of preparation.
Our promise made to you by our brand
Is your customer worth the risk of exceeding road weight limit?
Is your customer worth the risk of exceeding road weight limit?
It is crucial that we listen to our customer and provide the best service possible and it is also crucial to follow rules. Following weight restrictions for containers is such a rule. Trucking, container transport on the road is subject to road weight limits, which is not very easy to explain. When and where do we as service provider draw the line to offer service to a stubborn customer who is risking fines and potential lawsuits to save money on shipping?
The Purpose Of Road Weight Limits
Weight limits are imposed and enforced for safety reasons. They serve to control weight or length of vehicles, mostly trucks, on bridges and roads. They are in place for structural and environmental reasons and prevent large and heavy trucks from using inappropriate roads.
- Enforce safety for other vehicles and traffic
- Prevent damage to roads, bridges, and buildings
- Protect the environment
- Manage or reduce traffic congestion
The construction, management or even the dimensions of roads and bridges can differ between countries (and even states within the US), so what is appropriate for one structure will not be permitted for another and that is why rules are put in place.
Overweight is
A container or shipment can be considered overweight in one or all of the following three ways:
- Gross weight: A truck and its cargo cannot exceed a total gross weight, including tractor weight, chassis, container and cargo. Road weight limits for interstates or highways and off-roads might vary.
- Axle Weight: This is the allowed gross weight on a single axle of the truck, or a set of axles. In The United States, this is regulated by individual states and limits can vary. A truck or shipment passing through several states must comply with all individual regulations. Over 50{5a770a6816939510d987a3741aeb934d33a87e43a31a8867bb06bd9118285378} of all US overweight violations are axle issues and are typically caused by uneven load and weight distribution inside the container.
- Bridge formula: This calculates the maximum allowed weight according to the distance between sets of axles. Divided into Inner Bridge (between axle 2 and 5) and Outer Bridge (axle 1 and axle 5) measurement, bridge formula compliance factors in vehicle length, number of axles and total weight to arrive at an allowance per axle. It is largely dependent on the individual truck. Same as with axle weight, problems will arise with uneven load.
Universal Road Weight Limits
There is no universal maximum cargo weight. Limits and restrictions include the tractor, chassis, and container in addition to the cargo, and all of these elements can vary. A container can meet the restrictions for the allowance of total vehicle weight, while the truck can still be overweight on an individual axle. The most common cause for this is uneven cargo distribution within the container, including load, blocks and braces and other equipment. Non-standard load configurations with a reduced number of pallets per shipping container will further shift weight distribution. The equipment and trucks vary depending on country, region, provider and length of haul (short or long). Over-sized containers, refrigeration and generators can further affect vehicle weight.
Act wisely, customers come and go but risking breaking rules that are put in place to protect your community will have a long lasting impact.
Find the general rules here (https://www.logisticstrader.com/support/road-weight-limitations/ ) and when in doubt, ask.
Better safe than sorry.